Water tariff power shift

Government is considering a major shake-up of water tariff regulation that could transfer tariff-setting powers from the responsible ministry to an independent national regulator.

Sources within and outside government say preparatory work is underway to assess the feasibility of separating tariff regulation from ministerial control.

Women draw water from kiosks.

Ministry of Agriculture and Irrigation spokesperson Salome Gangire had not responded to our inquiry by press time.

A ministry official familiar with the development said the current arrangement, under which government oversees water utilities and approves their tariffs, raises concerns about the separation of regulatory and service-delivery functions.

“This is the practice in most African countries. The stand-alone regulator will bring sanity,” the official said in a WhatsApp interview.

The proposed reform is intended to align tariffs with operational costs, macroeconomic conditions and financial sustainability, while supporting Malawi’s Sustainable Development Goals and Malawi 2063 agenda, the official said.

Water, Sanitation and Hygiene (Wash) advocate Willies Mwandira confirmed the plan.

“I am very aware of government’s plan to establish a national independent water regulator,” he said.

Under the Waterworks Act, water boards set tariffs for water supply, meter rentals and other services, but the minister responsible approves the tariffs in the absence of an independent regulator.

The proposal comes amid mounting financial pressure on the country’s five water boards, which are grappling with rising operating costs, ageing infrastructure and what stakeholders describe as slow tariff adjustments.

The boards are Blantyre Water Board (BWB), Lilongwe Water Board (LWB), Northern Region Water Board (NRWB), Central Region Water Board (CRWB) and Southern Region Water Board (SRWB).

They are wholly owned by government and were established under the Waterworks Act No. 17 of 1995, operating as parastatal organisations under the ministry responsible for water development, currently the Ministry of Agriculture, Irrigation and Water Development.

The boards have in recent months submitted proposals to government seeking tariff increases to help meet operating costs and improve their financial sustainability.

Old regulatory debate

The proposed reform has also revived debate over an earlier attempt to establish a multi-sector regulator.

In 2004, government proposed the Malawi Water and Energy Regulatory Authority (Mwera) as part of structural reforms intended, among other things, to oversee water and energy, harmonise tariffs and reduce duplication among regulatory institutions.

The proposal did not materialise. Government instead established the Malawi Energy Regulatory Authority (Mera) to regulate the energy sector and the National Water Resources Authority (NWRA) to oversee water resources.

Consumers Association of Malawi (Cama) executive director John Kapito said the Mwera model remained relevant because it would have reduced regulatory costs by bringing the functions under one institution.

The model, which was supported by development partners, particularly the World Bank, was partly inspired by Tanzania’s Energy and Water Utilities Regulatory Authority (Ewura).

Kapito, however, questioned the need for another regulatory body.

“Already, we have too many regulatory bodies in the country and there is no need to create a separate body just for water,” he said.

He said although independent tariff regulation could be useful, creating another institution could increase costs for consumers.

Applied economist Steven Kayira similarly questioned the proposal, saying Malawi already has NWRA.

Rather than establishing a new statutory body, he said government should strengthen and broaden NWRA’s mandate to include economic regulation of water services, including tariff setting, service standards and consumer protection.

“The Water Resources Act already gives NWRA substantial regulatory responsibilities, while the Revised National Water Policy provides a basis for strengthening its institutional role,” Kayira said.

If government proceeds with a separate regulator, Kayira said it should have a clear statutory mandate and publicly disclosed tariff-setting methodology.

Tariff decisions, he said, should be evidence-based, subject to stakeholder consultation and supported by clear reasons.

Support for independent regulation

Water Users Association of Malawi (Wasama), however, supports the proposed reform, saying independent regulation could bring greater professionalism and predictability to tariff setting.

Wasama executive director Vitumbiko Mkandawire said using clear criteria and actual cost data would enable water utilities to maintain infrastructure, manage rising input costs and sustain services.

Mkandawire acknowledged that cost-reflective tariffs could lead to higher charges but said the objective should be improved supply hours, fewer breakdowns and more reliable water quality.

“The regulator’s main challenge will be balancing cost recovery with affordability. Utilities need realistic tariffs to operate sustainably, but poor households must be protected,” he said.

Mwandira also supports an independent regulator but said its mandate should be limited to tariff oversight, performance standards and consumer protection, rather than day-to-day utility operations.

He said the proposed regulator would not necessarily duplicate NWRA if the two institutions had clearly defined responsibilities.

“The problem only arises if both bodies start setting prices, approving revenue needs and policing utility efficiency, which would create overlap and confusion,” said Mwandira, executive director of Horizon Action.

He proposed a two-tier system in which the ministry sets policy and sector strategy, the water boards provide services, and an independent regulator approves tariff formulas, reviews costs, sets service benchmarks, and protects consumers.

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